Spread Betting Terms

01:   Bid

The City Index Bid Price is the price at which a customer can sell the quoted instrument at that time. 

02:   Buy

Where you buy at the City Index offer price, also known as "going long" 

03:   Contract month

The month during which a futures contract expires, and during which delivery may take place according to the terms of the contract. 

04:   Down bet

If you think the market will fall and you wish to back your judgement, you would place a down bet 

05:   Expiry date

The date on which the relevant City Index contract expires. 

06:   Futures

A standardised, transferable, exchange-traded contract that expires on a specified future date. 

07:   Liquidity

The ability of an asset to be converted into cash quickly, without any price discount and any restriction to size of transaction. 

08:   Offer

The City Index Offer Price is the price at which a customer can buy the quoted instrument at that time. 

09:   Over the counter (OTC)

An instrument that is not traded on an exchange, usually due to an inability to meet listing requirements e.g. a spread bet. 

10:   Per point

A term used by City Index to clarify the bets placed. For instance, a bet per point on British Airways is for each penny movement in the City Index British Airways share price. A bet per point on the FTSE is for each point move in the relevant City Index FTSE contract. E.G. a 100 point movement from 5100 to 5200 on a City Index Daily FTSE contract would therefore incorporate a win or loss of £100 per £1 placed as a bet. 

11:   Rollover

Rolling over is a facility offered by City Index to clients whose positions are due to expire within fourteen days. We will allow clients to roll positions from the expiring contract to the next contract month for a reduced spread. The original bet is closed, becomes due for settlement and a new bet is established. 

12:   Sell

Where you sell at the City Index bid also known as "going short" 

13:   Settlement price

The price at which City Index settles a position at expiry date. The basis of settlement for each contract can normally be found in the City Index Market Information Sheets. 

14:   Spot

For immediate delivery 

15:   Spread

The City Index spread is the difference between the current City Index bid and the current City Index offer 

16:   Tenth

A specific term used by finance traders to indicate you are placing your bet for every tenth of a full point. For example, a bet on the NASDAQ contract of £2 per point with City Index is, in fact, £20 per whole point movement in the underlying market. 

17:   Tick

The smallest permitted price movement in a contract. 

18:   Up bet

If you think the market will rise and you wish to back your judgement, you would place an up bet 

19:   Volatility

The relative rate at which the price of a City Index market moves either up or down. High volatility is associated with changeable and violent moving markets whilst orderly and controlled market conditions are considered low volatility. 

20:   GFD (Good For the Day)

An order valid for the day of placement only. 

21:   GTC (Good Till Cancelled).

An order valid until either cancelled or until the underlying contract has expired. 

22:   Limit

Order to either sell above the current market level or buy below that level at a price specified by you. 

23:   Stop

Order to either buy above the current market level or sell below that level at a price specified by you. 

24:   Margin

Clients who hold open positions, could become liable to pay margin. Margin is calculated using the formulae detailed in clauses 15.1(a) and 15.1(b) of our Terms and Conditions. 

25:   NTR (Notional Trading Requirement)

NTR is applicable to each trade that you place and is calculated as Stake x NTR multiplier for the relevant City Index market. NTR multipliers can be found in the Market Information Sheets. It is therefore imperative that, prior to dealing, you familiarize yourself with the levels of NTR applied when you are considering what is the suitable size of your stake. 

26:   At the money

A condition in which the strike price of an option is equal to the market price of the underlying instrument. 

27:   Close to the money

An option contract for which the strike price is close to the current market price of the underlying security. 

28:   Deep in the money

An option which is so far in the money that it is unlikely to go out of the money prior to expiration. 

29:   Deep out of the money

An option which is so far out of the money that it is unlikely to go in the money prior to expiration. 

30:   In the money

A situation when, the strike price of a Put Option is higher than the current underlying market or when the strike price of a Call Option is lower than the current underlying market 

31:   Option

The right, but not the obligation, to buy or sell a specific amount of a given stock, commodity, currency, index, or debt, at a specified price on a particular date in the future. 

32:   Out of the money

A situation when, the strike price of a Put Option is lower than the current underlying market or when the strike price of a Call Option is higher than the current underlying